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Nifty Outlook

Markets extended decline in continuation to the prevailing corrective phase and lost nearly half a percent. Weak global cues triggered a sharp decline in early trade followed by range-bound movement till the end. Consequently, the Nifty ended lower by 0.5% at 17,532 levels. On the sector front, a mixed trend was witnessed while the broader markets ended flat to marginally positive.

Markets are currently dancing to the global tunes and indications are pointing towards a further slide ahead. On the benchmark front, Nifty has immediate support at 17,450 and its decisive break would trigger a decline towards the 17,300 zone. We thus recommend maintaining extra caution and suggest limiting naked leveraged positions.

News

TVS Motor registered sales growth of 6% YoY with 347,156 units in September 2021 as against sales of 327,692 units YoY.

* VST Tillers Tractors' total sales were up 8.7% at 2,441 units versus 2,246 units, YoY.

* M&M’s total auto sales for the month of September 2021 stood at 28,112 vehicles. Sales of utility vehicles, passenger vehicles and exports segments were at 12,863 vehicles, 13,134 vehicles and 2529 vehicles, respectively.

Derivative Ideas 

NIFTY FUT has added around 4% in open interest as fresh long build up was seen in it. Current chart pattern also indicates further upmove in its price. We suggest buying in NIFTY 7th OCT 17600 CE as per below levels.

Strategy:- BUY NIFTY 7th OCT 17600 CE@78-80, sloss at 58, trgt 120.

Investment Pick - Orient Electric Ltd.

Orient Electric Ltd. (OEL) is part of the diversified USD 2.4 billion Indian conglomerates CK Birla group. OEL is a 60-year-old brand in fans and has established itself as a one-stop brand for lifestyle electrical solutions which include fans, lighting, home appliances and switch gears. Orient Electric has manufacturing facilities in Kolkata, Faridabad and Noida. The company enjoys a marketing presence across 35 countries. In the domestic market, it has a robust sales/ distribution network and service network with pan-India coverage.

After a muted show in FY21 due to the pandemic, we expect OEL’s revenue to grow at 17.5% CAGR over FY21-24E led by a recovery in both ECD and lighting & switchgear segment. On the margins front, higher operational efficiencies coupled with the focus on premiumization would aid margin improvement for OEL. We estimate OEL’s Revenue/EBITDA/PAT to grow at 17.5%/18.6%/24.8% over FY21-24E. We recommend a Buy on the stock with a target price of Rs. 439.

Buy - Orient Electric Ltd @ 9-12 Months CMP 330.7 TGT 439

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